The aim of the statistical survey of consumer prices is is to obtain country representative data for the price change of defined goods and services, consumed by households. The survey provides the necessary information for the compilation of the following indicators: Consumer Price Index (CPI), Harmonized Index of Consumer Prices (HICP) and Price Index of Small Basket (PISB).

CPI is the official measure of inflation in the Republic of Bulgaria. It measures the total relative price change of goods and services used by resident households for private (non-production) consumption.

HICP is comparable measure of inflation across EU Member states. It is one of the criterions of price stability and for readiness of Bulgaria to join the Euro-zone. HICP is calculated according to a harmonized approach and a single set of definitions for EU member states. HICP, just as CPI, measures the total relative change of the prices of goods and services but they differ in the coverage of households. HICP covers the consumption of all households on the territory of the country, including institutional and foreign ones, while CPI - consumption of Bulgarian households.

PISB measures the relative average price changes of defined socially useful and vital for the living goods and services that are essential for the biological and social existence of a separate person and household with comparatively low income.

Indices of consumer basket measure only the change of prices and therefore they are defined as "pure price change" indices. They do not measure the cost of living and are not cost of living indices.

CPI and HICP are used as macroeconomic indicators, measure of inflation, unlike PISB which give the public additional information on inflation processes in the country.

Classification system

ECOICOP classification – the European Classification of Individual Consumption According to Purpose, according Regulation (EU) 2016/792 of 11 May 2016[1] of the European Parliament and of the Council.

[1]Regulation (EU) 2016/792 of the European Parliament and of the Council of 11 May 2016 on harmonised indices of consumer prices and the house price index, and repealing Council Regulation (EC) No 2494/95 (ОJ L 135, 24.05.2016 ,p.11)

Sector coverage

Statistical survey of consumer prices covers sector "Households" and more precisely the goods and services consumed by households.

Statistical concepts and definitions

The following data are published:

CPI:

1) Monthly:

Indices (CPI 1995=100);

Monthly inflation rates (previous month=100);

Inflation rates since the beginning of the year (December of the previous year=100);

· Commission Regulation (EC) 2454/97 of 10 December 1997 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards minimum standards for the quality of HICP weightings (Text with EEA relevance);

· Council Regulation (EC) 1687/98 of 20 July 1998 amending Commission Regulation (EC) No 1749/96 concerning the coverage of goods and services of the harmonised index of consumer prices;

· Council Regulation (EC) 1688/98 of 20 July 1998 amending Commission Regulation (EC) No 1749/96 concerning the geographic and population coverage of the harmonised index of consumer prices;

· Commission Regulation (EC) 2646/98 of 9 Desember 1998 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards minimum standards for the treatment of tariffs in the Harmonized Index of Consumer Prices (Text with EEA relevance);

· Commission Regulation (EC) 1617/1999 of 23 July 1999 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 - as regards minimum standards for the treatment of insurance in the Harmonized Index of Consumer Prices and modifying Commission Regulation (EC) No 2214/96 (Text with EEA relevance);

· Council Regulation (EC) 2166/1999 of 8 October 1999 laying down detailed rules for the implementation of Regulation (EC) No 2494/95 as regards minimum standards for the treatment of products in the health, education and social protection sectors in the Harmonized Index of Consumer Prices (Text with EEA relevance);

· Commission Regulation (EC) 2601/2000 of 17 November 2000 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards the timing of entering purchaser prices into the Harmonised Index of Consumer Prices (Text with EEA relevance);

· Commission Regulation (EC) 2602/2000 of 17 November 2000 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards minimum standards for the treatment of price reductions in the Harmonised Index of Consumer Prices (Text with EEA relevance);

· Commission Regulation (EC) 1920/2001 of 28 September 2001 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards minimum standards for the treatment of service charges proportional to transaction values in the harmonized index of consumer prices and amending Commission (EC) No 2214/96 (Text with EEA relevance);

· Commission Regulation (EC) 1921/2001 of 28 September 2001 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards minimum standards for revisions of the harmonized index of consumer prices and amending Regulation (EC) No 2602/2000 (Text with EEA relevance);

· Commission Regulation (EC) 1708/2005 of 19 October 2005 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards the common index reference period for the harmonised index of consumer prices, and amending Regulation (EC) No 2214/96 (Text with EEA relevance);

· Council Regulation (EC) 701/2006 of 25 April 2006 laying down detailed rules for the implementation of Regulation (EC) No 2494/95 as regards the temporal coverage of price collection in the harmonised index of consumer prices (Text with EEA relevance);

· Commission Regulation (EC) 330/2009 of 22 April 2009 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards minimum standards for the treatment of seasonal products in the Harmonised Indices of Consumer Prices (HICP) (Text with EEA relevance);

· Commission Regulation (EU) No 1114/2010 of 1 December 2010 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards minimum standards for the quality of HICP weightings and repealing Commission Regulation (EC) No 2454/97 (Text with EEA relevance).

· Commission Regulation (EU) 2015/2010 of 11 November 2015 amending Regulation (EC) No 1708/2005 laying down detailed rules for the implementation of Council Regulation (EC) No 2494/95 as regards the common index reference period for the harmonised index of consumer prices.

· Regulation (EU) 2016/792 of the European Parliament and of the Council of 11 May 2016 on harmonised indices of consumer prices and the house price index, and repealing Council Regulation (EC) No 2494/95 (ОJ L 135, 24.05.2016 ,p.11).

Data sharing

Not applicable.

Confidentiality

Confidentiality - policy

· Law on Statistics;

· Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society.

Individual data are not published in accordance with article 25 of the Law on Statistics. The publishing of individual data can be performed only in accordance with article 26 of the same law.

Release policy

Release calendar

Information on the indices of consumer prices and the inflation is published monthly - between 12th and 16th of the month following the reference month. Date of publication of the statistical information is specified at the Release Calendar presenting the results of the statistical surveys carried out by the National Statistical Institute.

Statistics on consumer prices indices are published on the NSI website in section Inflation and Consumer Price Indices in accordance with the Law on Statistics and the European Statistics Code of Practice respecting the professional independence and aimed at objectivity, transparency and equal treatment of all consumers.

Frequency of dissemination

Monthly

Accessibility and clarity

News release

Statistics on consumer price indices are published in regular press-releases according to pre-defined timetable. Data are released monthly and cover: indices calculated on different base periods, monthly inflation rates, inflation rates since the beginning of the year, annual inflation rates and annual average inflation rates.

Publications

Statistical Yearbook;

Statistical Reference Book;

Electronic publication "Key indicators for Bulgaria";

· Brochure "Consumer Price Indices and Inflation";

· Brochure "Bulgaria".

On-line database

Statistics on consumer price indices are available to all users of the NSI website under the heading Inflation and Consumer Price Indices: http://www.nsi.bg/en/node/6010

In the context of compliance monitoring and quality assurance, Eurostat reviewed the HICP for Bulgaria in autumn 2007. The statistical practices used to compile the HICP for Bulgaria have been reviewed against HICP methodology and other guidelines and good practices in the field of consumer price indices. The recommendations have been followed by NSI and have been implemented in practice in order to assure accuracy, reliability and comparability of HICP.

In 2013 NSI elaborated an inventory of HICP sources and methods which is one of the main elements of the new strategy for monitoring the compliance of HICP produced by countries with the acquisitions of HICP reglaments. The inventory provides detailed description of the current practice in NSI and is the base for assessment to what extend the national practice is relevant to the legal requirements as well as the base for Compliance monitoring conducted by Eurostat.

Quality assessment

The representativity of the HICP, in terms of accuracy and reliability, is generally adequate. HICP is considered to be sufficiently accurate for all practical purposes it is put into.

Data on the consumer price indices are used for analysis, prognoses and management purposes of the government institutions, agencies and other organizations.

The main national users are: National Assembly of The Republic of Bulgaria, The Government, BNB, Ministries, National and State Agencies; information media;

Major international user are : Eurostat, ECB, IMF, UN ECE.

User satisfaction

NSI conducts a regular statistical survey "Users' satisfaction" which covers all statistical domains. It aims to assess user satisfaction in NSI data provision and to outline the recommendations for future development of statistical system according to the needs of the users.

Completeness

No missing data. Bulgaria produces and delivers the full set of data for indices and weights in the consumer price statistics.

Accuracy and reliability

Overall accuracy

Statistical data are with good accuracy. The accuracy of CPI, HICP and PISB is assured by strictly following Eurostat's methodological recommendations and regulations. The type of survey and the price collection methods ensure sufficient coverage and timeliness.

Sampling error

Construction and producing of CPI, HICP and PISB are based on a sample of consumer prices and household expenditures, which are not the complete universe of all prices/expenditures.

The common use of purposive sample makes it difficult to assess the sample error. Therefore and due to the complexity of price index structures NSI does not produce estimates on sampling errors.

Nevertheless the NSI aims to avoid possible bias due to sample misrepresentation by using a sample of consumer prices that is as large as possible by the given resource constraints.

NSI tries to optimise the allocation of resources by indicating the number of prices that should be observed in each geographic area and each item category, in order to minimize the variance of the all items index.

Non-sampling error

Non-sampling errors are not quantified for the indices of consumer prices. The NSI tries to reduce non-sampling errors through continuous methodological improvements and survey process improvements, which can help us to avoid coding and typing errors.

Timeliness and punctuality

Timeliness

Data are published on the 1st working day after the 11th calendar day of the month following the reference month, i.e. 12-16 days after the month in question.

Punctuality

Data are always delivered and published on the pre-announced release dates.

Coherence and comparability

Comparability - geographical

Indices of consumer prices are compiled on national level. In construction of the indices the national stratification is used and no regional indices are produced.

HICP is based on the harmonised definitions and classification stipulated in a series of legal acts it should be considered comparable to the HICPs of other EU countries.

Comparability - over time

Indices of consumer prices are fully comparable over time. However, there have been several improvements in methodology, since CPI, HICP and PICB were introduced. These changes may have introduced breaks in time series. In such cases, back calculations under the new standards were performed when appropriate basic data was available and historical series were revised.

Since 1999 NSI applies improved methodology for CPI construction in accordance with the requirements of Eurostat and IMF. In order to provide comparable series of CPI, monthly indices were revised for the period January 1995 - December 2000.

Implementations of the regulations on the treatment of seasonal items in HICP (since January 2011) and HICP weights (since January 2012) are the latest methodological improvements that impact on the HICP series. Parallel computations by the new and by the old methods were carried out and the implementation of two regulations was assessed, in order to assure comparable series of indices.

In compliance with Regulation (EC) No 2015/2010 since January 2016 the base year for HICP has been changed and the all indices have been calculated and published at 2015 as a base year.

CPI as well as HICP are measures of inflation, i.e. assesses the change of price level of goods and services. Both indices, in most of the cases are based on the same data sources, both are estimated from the same basket of goods and services, using the same statistical techniques and methods, but differ in their purpose as a measure of inflation therefore they use different concepts.

CPI is an official measure of inflation in Republic of Bulgaria. It gives information about the price changes in the national economy to the Government, business, citizens and the public as a whole. CPI is used for economic analysis, as a financial instrument, and also as a tool for indexation of different income, claims, liabilities, contract payments, etc.

HICP is used mainly for the monetary policy of EU. HICP is one of the criteria for assessment weather a member state is ready to join the Eurozone. HICP is used as a comparable measure of inflation in EU states and for evaluation of price stability in member states. This application of HICP requires harmonized conceptual framework and comparable results. In addition, HICP is increasingly used in economic analyses and indexation.

Estimated HICP differs from the national CPI. The main reason is the treatment of non-residents (foreign citizens) consumption on the territory of the country. This consumption is covered in HICP calculation but is out of the scope of the national CPI.

The same statistical techniques and methods used for calculation of CPI and HICP are used for the computation of PISB, but its purpose is to give additional information about the inflation processes in the country, not to measure the inflation. PISB measure the price change of certain socially useful and vital for the living goods and services, consumed by households with comparatively low income.

In general, monthly indices are not subject to revision. They are final when first released. The only exception is the January indicators, which were revised in March with final weights for the current year.

Statistical processing

Source data

The main data source for the CPI, HICP and PISB is the statistical survey of consumer prices. It is a sample survey with monthly periodicity.

Indices of consumer prices are based on four main samples:

· Consumer basket - a sample of goods and services, consumed by households, the price of which are registered;

· A sample of settlements, where the prices of goods and services from the consumer basket are observed;

· Observation points - a sample of shops, restaurants, cafes and others within the settlements;

· Registered prices - a sample of prices, comprising the prices in the observation points of the goods and services from the consumer basket.

Main data sources, used in weights construction are national accounts (for HICP) and the Households budget survey (for CPI and PISB).

Frequency of data collection

Prices of most goods and services are collected each month between the 1st and 28th of the month (prices are not collected during weekends and public holidays). The exceptions to this rule are the prices of some specific services which are registered each week (for example, Package holidays), or at the beginning or at the end of the month (for example, Kindergarten), or twice in a year (for example, University fees).

The prices are collected at selected observation points (outlets) - a sample of stores, shops, restaurants, cafes, etc. in the sample of localities. The sampled outlets are chosen using non-probability sampling methods: 'purposive' or 'judgmental' sampling. They are selected at regional level by price collectors in the regional statistical offices.

The number and structure of the observation points ensure that the optimum number of prices is collected, enough to represent national price for any group of goods and services observed. The number of observation points is determined in proportion to the population in the selected district centres and to the volume of retail sales in the relevant outlets. The sample includes outlets which:

have a large volume of retail sales;

supply a variety of goods representative of the relevant elementary aggregate groups.

The main types of trade are covered, including hypermarkets, supermarkets, general and specialised stores and market stalls. Mail order and Internet shopping are not included in the index (until now they have not been significant). Prices for PCs, mobile phones, mobile and fixed phone services are collected from the Internet sites of the relevant suppliers.

Methods of product selection and specification:

The prices of a specially selected representative sample of goods and services ('consumer basket') are collected. The products are selected and specified jointly by staff in central office and by price collectors in the regional statistical offices.

The procedures for specifying the representative goods and services can be described as follows:

definition of an initial product sampling framework using HBS results;

use of alternative data sources to define the exact characteristics of the products sampled (administrative data, private databases, etc.), in addition to HBS data, where possible;

use of price collectors' field experience if the data from the upper two sources are not enough to define and specify the products sampled;

extraction of the sample of goods and services representative by using purposive sampling methods.

The specifications for individual goods/services are more or less detailed, indicating size, unit, materials, model, brand characteristics, etc. Two kinds of specifications are used: detailed and general. How tight or loose the specifications will be depends on the nature of the product. If a product has many characteristics which could affect its price, the specification is more detailed.

The specific variety of each good/service (reference product-offer) whose price will be collected in the outlet sampled is selected by price collectors. They are instructed to pick the 'typical' product variety:

which is the top selling variety in the outlet sampled; and

which corresponds most closely to the predetermined characteristics of the product, included in the sample of price observation.

At the end of each year, during the annual revision of the CPI/HICP, NSI officials send to the RSOs experts series of instructions for procedures of price specifications which price collectors must apply. The problems on the sellection of the products and products' specifications are discussed at regular seminars/workshops with price collectors.

Data validation

Data quality checks and validation work is distributed between central office and regional statistical offices, but most of the data editing is carried out at the "Statistics of consumer prices and PPP" division in the central office of NSI.

The data validation process at regional offices can be divided into two stages. The first one takes place during the entering of the collected prices into the computer system, the second stage includes checking and validating by specialists in regional statistical offices and if necessary, prices are cross-checked in outlets.

There is no automatic rejection of observed prices in our validation process. Each case (problematic price) is considered individually and all necessary modifications are done only on the basis of relevant information.

Data compilation

Weights:

CPI: Data on the final monetary consumption expenditures of the households are used as statistical weights for the CPI calculation. The main source of information concerning the expenditures is the household budget survey in the country. CPI in year t is calculated on the basis of the expenditures structure of year t - 1.

Additional sources are used to work out in detail weights for electricity, heat energy, telecommunications, tobacco, clothing and footwear, medicines, fuels, automobiles, actual rentals for housing, insurances, accommodation services, books, newspapers etc. At the lowest level of aggregation 374 elementary aggregates are defined.

Weights are expressed as a part of the total expenditures of all goods and services within the scope of the index. They are updated annually based on Households budget survey and additional data.

HICP: Weights for HICP are constructed according to the requirements of Commission Regulation (EU) No 1114/2010[1] and Commission Regulation (EU) No 1688/98[2]. HICP weights reflect the structure of the final monetary consumption expenditures of the households (HFMCE) - domestic concept.

National accounts are the main source of data for construction of the HICP weights at the highest levels of aggregation. HICP in year t is calculated with the weights of year t-2.

In constructing of the weights for HICP, data from NA are adapted as follows:

From the HFMCE - domestic concept, as resulting from national accounts, are excluded:

· Own final consumption (to the extent that it forms part of HFCE and does not involve monetary transactions) - mainly imputed rentals COICOP 04.2.0

· Expenditure on the following COICOP classes:

a) Narcotics (COICOP 02.3.0)

b) Games of chance (COICOP 09.4.3)

c) Prostitution (COICOP 12.2.0)

d) Service charge for life insurance (12.5.1)

e) Administrative charges of private pension funds and the like (COICOP 12.6.2)

Data from household budget survey (HBS) is used for construction of the weights at the lower levels of aggregation, where the information from NA is not available.

Additional sources are used to work out in detail weights for electricity, heat energy, telecommunications, tobacco, clothing and footwear, medicines, fuels, automobiles, actual rentals for housing, insurances, accommodation services, books, newspapers etc. At the lowest level of aggregation 374 elementary aggregates are defined.

Weights are expressed as a part of the total expenditures of all goods and services within the scope of the index.

NA data for 2016 in combination with HBS data for 2017 are used as weights for calculation of the HICP in 2018. Weights are price-updated to December 2017 for ensuring of the common base period of the index.

Weights are reviewed and updated annually based on NA and HBS results and on other data sources.

PISB: Data for final monetary consumption expenditures of the 20% of the households with the lowest income are used as statistical weights for the PISB calculations. The main source of weights information is the Households Budget Survey in the country. This index in year t is calculated with the weights of year t-1.

Additional sources are used to work out in detail weights for some commodity groups.

Weights are expressed as a part of the total expenditures of all goods and services within the scope of the index. They are updated annually based on Households budget survey and additional data.

Computation of the lowest-level indices: For compilation of price indices for elementary aggregates the unweighted geometric mean of prices is used.

Computation of the high hierarchical level indices and of the total index: The Laspeyres formula is used in the compilation of the high-level indices and of the total index - weighted average of the indices and the corresponding weights.

Treatment of the missing observations and replacements

In case of temporally missing price the imputation is done in the 1st and in the 2nd month. For estimation of the missing price the method of matching samples is used and the short-term approach is applied - the imputation is done using the short-term price relative. If the price is still missing in the 3rd month, the price collector is obliged to select a replacement.

When replacing an old product by a new replacement product, price collectors are instructed to:

· Choose another product with the most similar quality and the one that accounts for the substantial amount of sales value in the outlet; and,

· Ask for the price of the new replacement product in the previous month.

When replacing an outlet (due to closure of outlet), price collectors are told to choose a new one, which has to be:

· as close as possible to the old outlet;

· of the same type;

· as similar as possible to the old outlet in term of their sales values.

Introduction of newly significant goods and services:

The procedures for identification of newly significant goods and services is based on:

· Analyses of HBS data on the structure of household expenditures;

· Price collectors information;

· Research and consultations with suppliers;

· Nomenclature of goods and services, included in the PPP survey;

· Eurostat list of the newly significant goods and services introduced to the member states.

Newly significant good and services are introduced at the end of each year (in December) during the annual revisions of consumer basket.

Treatment of price reductions

Seasonal sales, other sales prices and reduced prices (e.g. special offers, discounts, etc.) are included in the index when they are available to all potential consumers with no special conditions attached.

Treatment of seasonal products: The seasonal products are treated according to the requirements of the Commission Regulation (EC) N 330/2009.

The fixed-weight approach is used for determining of the weights for seasonal items i.e. during the whole year indices of seasonal products are calculated with fixed weights.

The prices of the missing fruits and vegetables during the out-of-season are estimated using the method of 'all-seasonal estimation':

in the first month of out-of season period, the estimated price is equal to the average price of the previous in-season period;

from the second month of out-of season period, the estimated price is equal to the price of the previous month, adjusted by the price change of all available products.

The prices of the missing clothing and footwear during the out-of-season are estimated using the method of 'counter-seasonal estimation':

in the first month of out-of season period, the estimated price is equal to the average price of the previous in-season period;

from the second month of out-of season period, the estimated price is equal to the price of the previous month, adjusted by the price change of all seasonal products that are in-season.

Adjustment

Seasonal adjustments are not applied.

Treatmentofthequalitychangesoftheobservedproducts

When the HICP is calculated, it is important to be priced the products with unchangeable quality, because the change in prices should reflect only 'pure' price changes not changes due to change in the quality of the observed products.

The following quality adjustment methods dealing with quality change of products are applied:

· Annual overlap. For many of the products new samples are drawn each year during the annual revision of consumer basket. December is used as linking month and then the dual price collection is done - the prices are collected both for the old and for the new sample. Quality differences between these two samples are then eliminated by overlap method called 'annual overlap'.

· Direct comparison. Price collectors are instructed to measure the price for the same variety throughout the year and if the variety disappears permanently from the market, they should choose another one with the most similar quality. In these cases, direct comparison method is applied, because of the minor difference in quality between the old and the new variety.

· Implicit quality adjustment methods. In some particular cases, the second approach is not applicable, due to the fact that quality difference between old and new product is 'significant', and implicit quality adjustment methods are applied. Overlap is used when the prices of both products are available in the same time period; bridged overlap (class-mean imputation) - when prices are not available; option cost.

Quality adjustment procedures are done centrally by the staff in central office. At regional level, price collectors do not make any quality adjustments; they are only instructed to report to central office for the all cases of considerable quality changes of the replacement products.

The aim of the statistical survey of consumer prices is is to obtain country representative data for the price change of defined goods and services, consumed by households. The survey provides the necessary information for the compilation of the following indicators: Consumer Price Index (CPI), Harmonized Index of Consumer Prices (HICP) and Price Index of Small Basket (PISB).

CPI is the official measure of inflation in the Republic of Bulgaria. It measures the total relative price change of goods and services used by resident households for private (non-production) consumption.

HICP is comparable measure of inflation across EU Member states. It is one of the criterions of price stability and for readiness of Bulgaria to join the Euro-zone. HICP is calculated according to a harmonized approach and a single set of definitions for EU member states. HICP, just as CPI, measures the total relative change of the prices of goods and services but they differ in the coverage of households. HICP covers the consumption of all households on the territory of the country, including institutional and foreign ones, while CPI - consumption of Bulgarian households.

PISB measures the relative average price changes of defined socially useful and vital for the living goods and services that are essential for the biological and social existence of a separate person and household with comparatively low income.

Indices of consumer basket measure only the change of prices and therefore they are defined as "pure price change" indices. They do not measure the cost of living and are not cost of living indices.

CPI and HICP are used as macroeconomic indicators, measure of inflation, unlike PISB which give the public additional information on inflation processes in the country.

Classification system

ECOICOP classification – the European Classification of Individual Consumption According to Purpose, according Regulation (EU) 2016/792 of 11 May 2016[1] of the European Parliament and of the Council.

[1]Regulation (EU) 2016/792 of the European Parliament and of the Council of 11 May 2016 on harmonised indices of consumer prices and the house price index, and repealing Council Regulation (EC) No 2494/95 (ОJ L 135, 24.05.2016 ,p.11)

Sector coverage

Statistical survey of consumer prices covers sector "Households" and more precisely the goods and services consumed by households.

Statistical concepts and definitions

The following data are published:

CPI:

1) Monthly:

Indices (CPI 1995=100);

Monthly inflation rates (previous month=100);

Inflation rates since the beginning of the year (December of the previous year=100);

Main data sources, used in weights construction are national accounts (for HICP) and the Households budget survey (for CPI and PISB).

Frequency of data collection

Prices of most goods and services are collected each month between the 1st and 28th of the month (prices are not collected during weekends and public holidays). The exceptions to this rule are the prices of some specific services which are registered each week (for example, Package holidays), or at the beginning or at the end of the month (for example, Kindergarten), or twice in a year (for example, University fees).

The prices are collected at selected observation points (outlets) - a sample of stores, shops, restaurants, cafes, etc. in the sample of localities. The sampled outlets are chosen using non-probability sampling methods: 'purposive' or 'judgmental' sampling. They are selected at regional level by price collectors in the regional statistical offices.

The number and structure of the observation points ensure that the optimum number of prices is collected, enough to represent national price for any group of goods and services observed. The number of observation points is determined in proportion to the population in the selected district centres and to the volume of retail sales in the relevant outlets. The sample includes outlets which:

have a large volume of retail sales;

supply a variety of goods representative of the relevant elementary aggregate groups.

The main types of trade are covered, including hypermarkets, supermarkets, general and specialised stores and market stalls. Mail order and Internet shopping are not included in the index (until now they have not been significant). Prices for PCs, mobile phones, mobile and fixed phone services are collected from the Internet sites of the relevant suppliers.

Methods of product selection and specification:

The prices of a specially selected representative sample of goods and services ('consumer basket') are collected. The products are selected and specified jointly by staff in central office and by price collectors in the regional statistical offices.

The procedures for specifying the representative goods and services can be described as follows:

definition of an initial product sampling framework using HBS results;

use of alternative data sources to define the exact characteristics of the products sampled (administrative data, private databases, etc.), in addition to HBS data, where possible;

use of price collectors' field experience if the data from the upper two sources are not enough to define and specify the products sampled;

extraction of the sample of goods and services representative by using purposive sampling methods.

The specifications for individual goods/services are more or less detailed, indicating size, unit, materials, model, brand characteristics, etc. Two kinds of specifications are used: detailed and general. How tight or loose the specifications will be depends on the nature of the product. If a product has many characteristics which could affect its price, the specification is more detailed.

The specific variety of each good/service (reference product-offer) whose price will be collected in the outlet sampled is selected by price collectors. They are instructed to pick the 'typical' product variety:

which is the top selling variety in the outlet sampled; and

which corresponds most closely to the predetermined characteristics of the product, included in the sample of price observation.

At the end of each year, during the annual revision of the CPI/HICP, NSI officials send to the RSOs experts series of instructions for procedures of price specifications which price collectors must apply. The problems on the sellection of the products and products' specifications are discussed at regular seminars/workshops with price collectors.

Data validation

Data quality checks and validation work is distributed between central office and regional statistical offices, but most of the data editing is carried out at the "Statistics of consumer prices and PPP" division in the central office of NSI.

The data validation process at regional offices can be divided into two stages. The first one takes place during the entering of the collected prices into the computer system, the second stage includes checking and validating by specialists in regional statistical offices and if necessary, prices are cross-checked in outlets.

There is no automatic rejection of observed prices in our validation process. Each case (problematic price) is considered individually and all necessary modifications are done only on the basis of relevant information.

Data compilation

Weights:

CPI: Data on the final monetary consumption expenditures of the households are used as statistical weights for the CPI calculation. The main source of information concerning the expenditures is the household budget survey in the country. CPI in year t is calculated on the basis of the expenditures structure of year t - 1.

Additional sources are used to work out in detail weights for electricity, heat energy, telecommunications, tobacco, clothing and footwear, medicines, fuels, automobiles, actual rentals for housing, insurances, accommodation services, books, newspapers etc. At the lowest level of aggregation 374 elementary aggregates are defined.

Weights are expressed as a part of the total expenditures of all goods and services within the scope of the index. They are updated annually based on Households budget survey and additional data.

HICP: Weights for HICP are constructed according to the requirements of Commission Regulation (EU) No 1114/2010[1] and Commission Regulation (EU) No 1688/98[2]. HICP weights reflect the structure of the final monetary consumption expenditures of the households (HFMCE) - domestic concept.

National accounts are the main source of data for construction of the HICP weights at the highest levels of aggregation. HICP in year t is calculated with the weights of year t-2.

In constructing of the weights for HICP, data from NA are adapted as follows:

From the HFMCE - domestic concept, as resulting from national accounts, are excluded:

· Own final consumption (to the extent that it forms part of HFCE and does not involve monetary transactions) - mainly imputed rentals COICOP 04.2.0

· Expenditure on the following COICOP classes:

a) Narcotics (COICOP 02.3.0)

b) Games of chance (COICOP 09.4.3)

c) Prostitution (COICOP 12.2.0)

d) Service charge for life insurance (12.5.1)

e) Administrative charges of private pension funds and the like (COICOP 12.6.2)

Data from household budget survey (HBS) is used for construction of the weights at the lower levels of aggregation, where the information from NA is not available.

Additional sources are used to work out in detail weights for electricity, heat energy, telecommunications, tobacco, clothing and footwear, medicines, fuels, automobiles, actual rentals for housing, insurances, accommodation services, books, newspapers etc. At the lowest level of aggregation 374 elementary aggregates are defined.

Weights are expressed as a part of the total expenditures of all goods and services within the scope of the index.

NA data for 2016 in combination with HBS data for 2017 are used as weights for calculation of the HICP in 2018. Weights are price-updated to December 2017 for ensuring of the common base period of the index.

Weights are reviewed and updated annually based on NA and HBS results and on other data sources.

PISB: Data for final monetary consumption expenditures of the 20% of the households with the lowest income are used as statistical weights for the PISB calculations. The main source of weights information is the Households Budget Survey in the country. This index in year t is calculated with the weights of year t-1.

Additional sources are used to work out in detail weights for some commodity groups.

Weights are expressed as a part of the total expenditures of all goods and services within the scope of the index. They are updated annually based on Households budget survey and additional data.

Computation of the lowest-level indices: For compilation of price indices for elementary aggregates the unweighted geometric mean of prices is used.

Computation of the high hierarchical level indices and of the total index: The Laspeyres formula is used in the compilation of the high-level indices and of the total index - weighted average of the indices and the corresponding weights.

Treatment of the missing observations and replacements

In case of temporally missing price the imputation is done in the 1st and in the 2nd month. For estimation of the missing price the method of matching samples is used and the short-term approach is applied - the imputation is done using the short-term price relative. If the price is still missing in the 3rd month, the price collector is obliged to select a replacement.

When replacing an old product by a new replacement product, price collectors are instructed to:

· Choose another product with the most similar quality and the one that accounts for the substantial amount of sales value in the outlet; and,

· Ask for the price of the new replacement product in the previous month.

When replacing an outlet (due to closure of outlet), price collectors are told to choose a new one, which has to be:

· as close as possible to the old outlet;

· of the same type;

· as similar as possible to the old outlet in term of their sales values.

Introduction of newly significant goods and services:

The procedures for identification of newly significant goods and services is based on:

· Analyses of HBS data on the structure of household expenditures;

· Price collectors information;

· Research and consultations with suppliers;

· Nomenclature of goods and services, included in the PPP survey;

· Eurostat list of the newly significant goods and services introduced to the member states.

Newly significant good and services are introduced at the end of each year (in December) during the annual revisions of consumer basket.

Treatment of price reductions

Seasonal sales, other sales prices and reduced prices (e.g. special offers, discounts, etc.) are included in the index when they are available to all potential consumers with no special conditions attached.

Treatment of seasonal products: The seasonal products are treated according to the requirements of the Commission Regulation (EC) N 330/2009.

The fixed-weight approach is used for determining of the weights for seasonal items i.e. during the whole year indices of seasonal products are calculated with fixed weights.

The prices of the missing fruits and vegetables during the out-of-season are estimated using the method of 'all-seasonal estimation':

in the first month of out-of season period, the estimated price is equal to the average price of the previous in-season period;

from the second month of out-of season period, the estimated price is equal to the price of the previous month, adjusted by the price change of all available products.

The prices of the missing clothing and footwear during the out-of-season are estimated using the method of 'counter-seasonal estimation':

in the first month of out-of season period, the estimated price is equal to the average price of the previous in-season period;

from the second month of out-of season period, the estimated price is equal to the price of the previous month, adjusted by the price change of all seasonal products that are in-season.

Adjustment

Seasonal adjustments are not applied.

Treatmentofthequalitychangesoftheobservedproducts

When the HICP is calculated, it is important to be priced the products with unchangeable quality, because the change in prices should reflect only 'pure' price changes not changes due to change in the quality of the observed products.

The following quality adjustment methods dealing with quality change of products are applied:

· Annual overlap. For many of the products new samples are drawn each year during the annual revision of consumer basket. December is used as linking month and then the dual price collection is done - the prices are collected both for the old and for the new sample. Quality differences between these two samples are then eliminated by overlap method called 'annual overlap'.

· Direct comparison. Price collectors are instructed to measure the price for the same variety throughout the year and if the variety disappears permanently from the market, they should choose another one with the most similar quality. In these cases, direct comparison method is applied, because of the minor difference in quality between the old and the new variety.

· Implicit quality adjustment methods. In some particular cases, the second approach is not applicable, due to the fact that quality difference between old and new product is 'significant', and implicit quality adjustment methods are applied. Overlap is used when the prices of both products are available in the same time period; bridged overlap (class-mean imputation) - when prices are not available; option cost.

Quality adjustment procedures are done centrally by the staff in central office. At regional level, price collectors do not make any quality adjustments; they are only instructed to report to central office for the all cases of considerable quality changes of the replacement products.

Quality management

Quality assurance

In the context of compliance monitoring and quality assurance, Eurostat reviewed the HICP for Bulgaria in autumn 2007. The statistical practices used to compile the HICP for Bulgaria have been reviewed against HICP methodology and other guidelines and good practices in the field of consumer price indices. The recommendations have been followed by NSI and have been implemented in practice in order to assure accuracy, reliability and comparability of HICP.

In 2013 NSI elaborated an inventory of HICP sources and methods which is one of the main elements of the new strategy for monitoring the compliance of HICP produced by countries with the acquisitions of HICP reglaments. The inventory provides detailed description of the current practice in NSI and is the base for assessment to what extend the national practice is relevant to the legal requirements as well as the base for Compliance monitoring conducted by Eurostat.

Quality assessment

The representativity of the HICP, in terms of accuracy and reliability, is generally adequate. HICP is considered to be sufficiently accurate for all practical purposes it is put into.

Data on the consumer price indices are used for analysis, prognoses and management purposes of the government institutions, agencies and other organizations.

The main national users are: National Assembly of The Republic of Bulgaria, The Government, BNB, Ministries, National and State Agencies; information media;

Major international user are : Eurostat, ECB, IMF, UN ECE.

User satisfaction

NSI conducts a regular statistical survey "Users' satisfaction" which covers all statistical domains. It aims to assess user satisfaction in NSI data provision and to outline the recommendations for future development of statistical system according to the needs of the users.

Completeness

No missing data. Bulgaria produces and delivers the full set of data for indices and weights in the consumer price statistics.

Data completeness - rate

100%

Accuracy and reliability

Overall accuracy

Statistical data are with good accuracy. The accuracy of CPI, HICP and PISB is assured by strictly following Eurostat's methodological recommendations and regulations. The type of survey and the price collection methods ensure sufficient coverage and timeliness.

Sampling error

Construction and producing of CPI, HICP and PISB are based on a sample of consumer prices and household expenditures, which are not the complete universe of all prices/expenditures.

The common use of purposive sample makes it difficult to assess the sample error. Therefore and due to the complexity of price index structures NSI does not produce estimates on sampling errors.

Nevertheless the NSI aims to avoid possible bias due to sample misrepresentation by using a sample of consumer prices that is as large as possible by the given resource constraints.

NSI tries to optimise the allocation of resources by indicating the number of prices that should be observed in each geographic area and each item category, in order to minimize the variance of the all items index.

Sampling errors - indicators

Not applicable.

Non-sampling error

Non-sampling errors are not quantified for the indices of consumer prices. The NSI tries to reduce non-sampling errors through continuous methodological improvements and survey process improvements, which can help us to avoid coding and typing errors.

Coverage error

No coverage errors. No difference between the target population and the frame population.

Over-coverage - rate

None.

Common units - proportion

Not applicable.

Measurement error

Information system Consumer prices (IS Consumer prices) is used to enter data on product-offer's prices and characteristics. Some technical controls are implemented to prevent against typo errors, wrong input of price or measure unit, etc. Nevertheless additional data quality checks and validation work is done in regional statistical offices and central office as described in the point Data validation.

Non response error

Not applicable.

Unit non-response - rate

Not applicable.

Item non-response - rate

Not applicable.

Processing error

An IT system is developed and performs indices calculations. Logical controls are implemented in the software to minimise/eliminate the processing errors. Validations are done as described in the point Data validation.

In general, monthly indices are not subject to revision. They are final when first released. The only exception is the January indicators, which were revised in March with final weights for the current year.

Data revision - average size

Once in a year - indices for January.

Timeliness and punctuality

Timeliness

Data are published on the 1st working day after the 11th calendar day of the month following the reference month, i.e. 12-16 days after the month in question.

Time lag - first results

Time lag - final results

15 days after the end of the reference period (on average)

Punctuality

Data are always delivered and published on the pre-announced release dates.

Punctuality - delivery and publication

None.

Coherence and comparability

Comparability - geographical

Indices of consumer prices are compiled on national level. In construction of the indices the national stratification is used and no regional indices are produced.

HICP is based on the harmonised definitions and classification stipulated in a series of legal acts it should be considered comparable to the HICPs of other EU countries.

Asymmetry for mirror flows statistics - coefficient

Not applicable.

Comparability - over time

Indices of consumer prices are fully comparable over time. However, there have been several improvements in methodology, since CPI, HICP and PICB were introduced. These changes may have introduced breaks in time series. In such cases, back calculations under the new standards were performed when appropriate basic data was available and historical series were revised.

Since 1999 NSI applies improved methodology for CPI construction in accordance with the requirements of Eurostat and IMF. In order to provide comparable series of CPI, monthly indices were revised for the period January 1995 - December 2000.

Implementations of the regulations on the treatment of seasonal items in HICP (since January 2011) and HICP weights (since January 2012) are the latest methodological improvements that impact on the HICP series. Parallel computations by the new and by the old methods were carried out and the implementation of two regulations was assessed, in order to assure comparable series of indices.

In compliance with Regulation (EC) No 2015/2010 since January 2016 the base year for HICP has been changed and the all indices have been calculated and published at 2015 as a base year.

CPI: since Jan'1995 until Dec'2017 - 276 months (last break in time serries is in January 1995)

HICP: since Jan'2005 until Dec'2017 - 156 months (last break in time serries is in January 2005)

PISB: since Jan'2001 until Dec'2017 - 204 months (no break in time serries)

Coherence - cross domain

CPI as well as HICP are measures of inflation, i.e. assesses the change of price level of goods and services. Both indices, in most of the cases are based on the same data sources, both are estimated from the same basket of goods and services, using the same statistical techniques and methods, but differ in their purpose as a measure of inflation therefore they use different concepts.

CPI is an official measure of inflation in Republic of Bulgaria. It gives information about the price changes in the national economy to the Government, business, citizens and the public as a whole. CPI is used for economic analysis, as a financial instrument, and also as a tool for indexation of different income, claims, liabilities, contract payments, etc.

HICP is used mainly for the monetary policy of EU. HICP is one of the criteria for assessment weather a member state is ready to join the Eurozone. HICP is used as a comparable measure of inflation in EU states and for evaluation of price stability in member states. This application of HICP requires harmonized conceptual framework and comparable results. In addition, HICP is increasingly used in economic analyses and indexation.

Estimated HICP differs from the national CPI. The main reason is the treatment of non-residents (foreign citizens) consumption on the territory of the country. This consumption is covered in HICP calculation but is out of the scope of the national CPI.

The same statistical techniques and methods used for calculation of CPI and HICP are used for the computation of PISB, but its purpose is to give additional information about the inflation processes in the country, not to measure the inflation. PISB measure the price change of certain socially useful and vital for the living goods and services, consumed by households with comparatively low income.

Coherence - sub annual and annual statistics

Annual CPI/HICP/PISB indices are derived from monthly and are fully reconcilable.

Statistics on consumer price indices are published in regular press-releases according to pre-defined timetable. Data are released monthly and cover: indices calculated on different base periods, monthly inflation rates, inflation rates since the beginning of the year, annual inflation rates and annual average inflation rates.

Publications

Statistical Yearbook;

Statistical Reference Book;

Electronic publication "Key indicators for Bulgaria";

· Brochure "Consumer Price Indices and Inflation";

· Brochure "Bulgaria".

On-line database

Statistics on consumer price indices are available to all users of the NSI website under the heading Inflation and Consumer Price Indices: http://www.nsi.bg/en/node/6010

· Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society.

Pages

The National Statistical Institute presents to users of statistical information the annual publication - Statistical Reference Book 2018 in English.

The Statistical Reference Book presents topical information on the demographic processes as well as the economic, social and cultural development of the Republic of Bulgaria for the 2014 - 2017 period.

The National Statistical Institute of Bulgaria offers a different view of the statistical information included in the 85th edition of the Statistical Yearbook of the Republic of Bulgaria.

The publication is intended for a wider audience as statistical data are presented in a plain and easy understandable way.

The current state and changes in the socio-economic and cultural life in the country are presented not in the traditional way in tables and text, but through infographics - images, graphics and other visualization tools.

The National Statistical Institute presents to users of statistical information the annual publication - Statistical Reference Book 2018 in Bulgarian.

The Statistical Reference Book presents topical information on the demographic processes as well as the economic, social and cultural development of the Republic of Bulgaria for the 2014 - 2017 period.

The National Statistical Institute (NSI) has the pleasure to present to the attention of national and foreign users of statistical information the 84th edition of the ‘Statistical Yearbook of the Republic of Bulgaria’ in printed and electronic format.

It provides current statistical information about the demographic, economic and social development of the country for 2012 - 2016 in different territorial and classification aggregations and breakdowns.

The National Statistical Institute presents the bilingual (Bulgarian/English) brochure Bulgaria 2018 to users of statistical information. The brochure is addressed to a wide range of users (international institutions, business, students, experts etc.) and changes the traditional presentation of statistical information by offering an innovative structure with a parallel translation in English. The publication contains topical statistical information about the demographic, social and economic development of the country over the 2013 - 2017 period.